What are you buying today?

[Gregmal]

If you’re bullish on oil prices why not just go long futures/options? Most money I ever made in oil was owning futures options into the Ukraine war. Was glorious. You don’t have to wait for the slow burn value accretion, you don’t rely on management; if the price goes higher, you get paid.

[Blake Hampton]

Just now, Gregmal said:

If you’re bullish on oil prices why not just go long futures/options? Most money I ever made in oil was owning futures options into the Ukraine war. Was glorious. You don’t have to wait for the slow burn value accretion, you don’t rely on management; if the price goes higher, you get paid.

I've thought about owning commodities but I like the companies I got quite a bit. I'm not certain that oil is going to triple or anything of the sort, I just strongly feel like $61 a barrel is quite a low price given the factors.

[dwy000]

2 hours ago, Spekulatius said:

I think the EU will respond with package that is liked  consist of

1) Target tariffs against aerospace products (to level Airbus versus Boeing etc’), Agricultural goods (hitting Mags home base) and maybe a few other product groups

2 ) a stimulus component to shield exporters hit by the recent tariffs

3) something related to hitting big tech. I am not sure what it is,  it could be restricting access to some markets, a digital tax or a security component that forces them to operate their European business somewhat independently (similar to utilities or defense cos that are foreign owned)

 

I don’t think the Mag7 stocks will like 3)

 

These are just my guesses based on chatter here there and what makes sense from an EU perspective in my opinion.

I've gone quite long DELL over the past few days.  While I agree there will be some pushback globally against MAG7, the beauty of cloud is that the infrastructure can be almost anywhere.  Too expensive to build an AI site in Montana?  Just put it in Alberta.  Or Melbourne. It's really difficult to tariff software.  

[hasilp89]

11 minutes ago, Blake Hampton said:

I just strongly feel like $61 a barrel is quite a low price given the factors.

Wouldn't buying call options make more sense then? 1000 things could go wrong with the companies you own.

[Blake Hampton]

6 minutes ago, hasilp89 said:

Wouldn't buying call options make more sense then? 1000 things could go wrong with the companies you own.

Theta?

[Blake Hampton]

I'm Chronos, Greek god of time.

[73 Reds]

35 minutes ago, Blake Hampton said:

I always appreciate input, and I want to take a moment to talk about oil prices because it’s something I’ve been thinking about. Back in 2020, during the global pandemic that brought much of the world to a screeching halt, WTI crude oil averaged around $40 per barrel. Adjusted for inflation, that would be about $50 a barrel today. This was a time when a lot of governments were literally conducting lockdowns and not allowing people to leave their homes.

 

Given everything happening today, I just don’t see how oil prices can sustainably drop much lower than that over the longer-term. You talk about oil prices cratering, that very well could be what's happening right now.

How would you describe Buffett's investment thesis for owning OXY?  What is his timeline?  Are both consistent with yours?

[Blake Hampton]

13 minutes ago, 73 Reds said:

How would you describe Buffett's investment thesis for owning OXY?  What is his timeline?  Are both consistent with yours?

 

6 hours ago, Blake Hampton said:

A couple of reasons:

- Geopolitically, there's no better place to produce than Texas.

- Management under Hollub is incredible.

- Though high decline rate wells do require more capex, they also have the ability to benefit from volatility in oil prices. You can produce it quick and shut it off quick. That has some advantages.

- Larger companies have better economies of scale, and Occidental specifically has relatively low production costs per barrel.

- They have better access to credit markets and can get stupid terms on their debt. I think financing the purchase of Crown Rock was quite smart.

- The Permian is one of the best oil basins in the world. Low cost, lots of reserves, and lots of future potential.

 

Timeline for Buffett I think is forever, and I feel the same on all of it.

[73 Reds]

1 minute ago, Blake Hampton said:

 

 

Timeline for Buffett I think is forever, and I feel the same on all of it.

Another good reason to own Berkshire.

[sleepydragon]

18 minutes ago, Blake Hampton said:

 

 

Timeline for Buffett I think is forever, and I feel the same on all of it.

 

Also OXY is shifting economic interests from bond owner to equity owner overtime -- as they pay off debts quickly more FCF will go to equity owners. 

[Buckeye]

1 hour ago, Blake Hampton said:

I always appreciate input, and I want to take a moment to talk about oil prices because it’s something I’ve been thinking about. Back in 2020, during the global pandemic that brought much of the world to a screeching halt, WTI crude oil averaged around $40 per barrel. Adjusted for inflation, that would be about $50 a barrel today. This was a time when a lot of governments were literally conducting lockdowns and not allowing people to leave their homes.

 

Given everything happening today, I just don’t see how oil prices can sustainably drop much lower than that over the longer-term. You talk about oil prices cratering, that very well could be what's happening right now.

Didn’t oil go to zero, or negative, during the start of the pandemic?

 

Or was it the futures that went negative, with the spot pricing dropping to $11?

 

From the link below 

• In April, an oversupply of oil led to an unprecedented collapse in oil prices, forcing the contract futures price for West Texas Intermediate (WTI) to plummet from $18 a barrel to around -$37 a barrel.

 

https://www.investopedia.com/articles/investing/100615/will-oil-prices-go-2017.asp#:~:text=The May 2020 futures contract,that was suddenly massively oversupplied.

Edited April 5, 2025 by Buckeye

[hasilp89]

2 hours ago, Blake Hampton said:

Theta?

I don’t speak Greek. 
 

 

[Sweet]

3 hours ago, Buckeye said:

Didn’t oil go to zero, or negative, during the start of the pandemic?

 

Or was it the futures that went negative, with the spot pricing dropping to $11?

 

From the link below 

• In April, an oversupply of oil led to an unprecedented collapse in oil prices, forcing the contract futures price for West Texas Intermediate (WTI) to plummet from $18 a barrel to around -$37 a barrel.

 

https://www.investopedia.com/articles/investing/100615/will-oil-prices-go-2017.asp#:~:text=The May 2020 futures contract,that was suddenly massively oversupplied.

Yeh, the futures guys had to pay other traders to take their contracts lol, which is why the price was negative.  What a time.

[Castanza]

Why do new young value investors gravitate towards the most macro, complex, unpredictable, geopolitical investment class? I’ll never understand this. There is definitely some romance here….

 

much easier hurdles out there 

[Spekulatius]

1 hour ago, Castanza said:

Why do new young value investors gravitate towards the most macro, complex, unpredictable, geopolitical investment class? I’ll never understand this. There is definitely some romance here….

 

much easier hurdles out there 

Like crypto?

[Castanza]

1 hour ago, Spekulatius said:

Like crypto?

Not my cup of tea 

[Parsad]

7 hours ago, 73 Reds said:

Another good reason to own Berkshire.

 

But this is partly my concern after Buffett is gone.  Who at Berkshire would have pulled the trigger on a $150B+ sale of Apple like he did?  Maybe Ajit Jain.  I can't see Greg Abel doing something like that...or Ted and Todd.

 

Berkshire is now ready to deploy all that cash, and probably at the perfect time once again!  The only guy I've seen do something similar on a regular basis is Prem and his team...and even there, the batting average isn't as good as Buffett's!

 

Long live the GOAT!  Cheers!

[sleepydragon]

3 hours ago, Castanza said:

Why do new young value investors gravitate towards the most macro, complex, unpredictable, geopolitical investment class? I’ll never understand this. There is definitely some romance here….

 

much easier hurdles out there 

Buffett: “people want to get rich fast. Nobody want to get rich slowly”

 

[sleepydragon]

1 minute ago, Parsad said:

 

But this is partly my concern after Buffett is gone.  Who at Berkshire would have pulled the trigger on a $150B+ sale of Apple like he did?  Maybe Ajit Jain.  I can't see Greg Abel doing something like that...or Ted and Todd.

 

Berkshire is now ready to deploy all that cash, and probably at the perfect time once again!  The only guy I've seen do something similar on a regular basis is Prem and his team...and even there, the batting average isn't as good as Buffett's!

 

Long live the GOAT!  Cheers!

With all this money he can buy entire panama or maybe vietnam .haha 

[sleepydragon]

3 minutes ago, Parsad said:

 

But this is partly my concern after Buffett is gone.  Who at Berkshire would have pulled the trigger on a $150B+ sale of Apple like he did?  Maybe Ajit Jain.  I can't see Greg Abel doing something like that...or Ted and Todd.

 

Berkshire is now ready to deploy all that cash, and probably at the perfect time once again!  The only guy I've seen do something similar on a regular basis is Prem and his team...and even there, the batting average isn't as good as Buffett's!

 

Long live the GOAT!  Cheers!

He must feel like a “an oversexed guy in a whorehouse” now. The fun, excitement and stimulation may very will extend his life span by another 10 years. 

[Parsad]

3 minutes ago, sleepydragon said:

He must feel like a “an oversexed guy in a whorehouse” now. The fun, excitement and stimulation may very will extend his life span by another 10 years. 

 

I hope so!  Like many on here...I just love the guy and still have so much to learn from him.  Cheers!

[bizaro86]

14 hours ago, Blake Hampton said:

 

- Management under Hollub is incredible.

 

 

Do you have any reason other than WEB's comments to believe this? I don’t agree with it and am curious as to your reasoning.

 

Edited to add: he says nice things about everyone so I very much discount that.

Edited April 6, 2025 by bizaro86

[moatrep]

4 hours ago, bizaro86 said:

 

Do you have any reason other than WEB's comments to believe this? I don’t agree with it and am curious as to your reasoning.

 

Edited to add: he says nice things about everyone so I very much discount that.

If you see the income statement Oxy sales and general expenses are only 5 % of assets, chevron spends 15% and exxon 10%. Most oil companies spend around what the two oil gigants spend. Later if you grab the oil production of each company and compare by the book asset value they roughly go in line, so it is a fair comparison. Oxy full play in the permian is arguably more atractive in this macro. Oil reserves for oxy are around 10 years, chevron oil reserves are lower, around 5 years if I remeber properly. On this exxon is similar to Oxy though. At the end the enterprise value of oxy is around 80% of assets and the two oil giganst around 120%, so you have an arguably better play 30 % less. This numbers were from last month, now the ev has gone down

Edited April 6, 2025 by moatrep

[Blake Hampton]

8 hours ago, bizaro86 said:

 

Do you have any reason other than WEB's comments to believe this? I don’t agree with it and am curious as to your reasoning.

 

Edited to add: he says nice things about everyone so I very much discount that.

- Honest about climate change

- Honest about oil and gas operations

- Manages a company with low operating costs per barrel

- Sees future risks and is structuring the company for them appropriately

 

Go watch some interviews of her. She really is an interesting person to listen to:
 

 

Edited April 6, 2025 by Blake Hampton

[Blake Hampton]

Oh, and WTI oil averaged $40 a barrel in 2020 ($50 when adjusted for inflation) — during both the worst demand destruction in its history and a price war.

 

Edited April 6, 2025 by Blake Hampton